Havas Edge’s Sean Kalub sees a strong scatter market in the face of tariffs

Several major publishers — Disney, NBCUniversal, Fox and Netflix — are closing out their upfronts. NBCU reported record sales commitments overall and its largest digital numbers. Netflix estimated that it would roughly double its ad revenue this year, and 40% of Disney’s upfront volume went to streaming.

As upfront season is shaking out before the commitments activate in the fall, The Current spoke with Sean Kalub, Havas Edge’s executive vice president of video investments. Kalub targeted a strong scatter market, advertisers’ wait-and-see investment approach and Nielsen moving away from panel-only measurement as three major industry talking points.

This interview has been edited for length and clarity.

What sense do you have from upfront conversations this summer?

The upfronts, in general, is a prediction game of whether or not the advertisers think they can drive efficiency. We are talking to the major ownership groups, and I am pretty deep in those discussions.

At this point, given tariffs, given the economic outlook, we’re getting a lot of advertisers wanting to hold dollars back slightly and take a wait-and-see approach on how everything unfolds. I think eMarketer has the upfront market down 3% this year.

From a rate of change standpoint, it’s a bit all over the place given Nielsen’s move to big data. That actually changes things because what used to get you a million impressions now might end up getting 1.2 million impressions because of the way they’re modeling data out.

It’s a very big conversation at the upfronts. How do you keep cost integrity on a year-over-year basis when the currency has changed?

With those measurement and currency conversations, is it more that you as an agency are figuring out where measurement is moving and then distilling that information down to the advertisers? It’s not necessarily the advertisers coming to you saying, “help us figure that out”?

It’s a little bit of both. You’re trying to understand how does a dollar last year on something equal a dollar this year.

What I mean by that is last year, Monday Night Football was $275,000 for a 30-second spot, and let’s say you bought that at a $40 CPM. This year, if it’s at $300,000 for 30 seconds, is the CPM more efficient? Are you getting a bigger audience?

There’s cost of a unit and then there’s the cost per how many people you think viewed that. You’re trying to figure out with the big data set what is true. You almost have to back test the big data.

Anyway, it is very much agency led — [the] preparation working with clients to try to measure and value media on a year-over-year basis.

Going back to tariffs, that was one of the through lines from upfront presentations. Can you tell me more about advertisers’ confidence with tariffs and the upfronts? And do you think that there’s going to be more of a move to the scatter market?

Yeah, our estimate is that the scatter market will be robust. The way I would describe it is a wide range of outcomes. There’s a bigger outcome band for next year.

There’s an outcome that you don’t get two rate cuts, GDP growth slows under 2%, there is inflationary pressure causing demand destruction, and, therefore, the CFOs are really driving the CMOs to hold back some dollars.

There’s another scenario that says the tariffs weren’t really anything big. GDP growth goes to 3%, there’s two rate cuts this year, and the market is at all-time highs. Then advertisers say no problem, let’s just go ahead and spend money.

This is why only a portion of our clients really are doing upfronts. Fundamentally, there’s a lot of media within the scatter market.

If you look at the eMarketer numbers, the overall TV market is around $86 billion. If you look at CTV and TV and the upfront market is $19 billion. So there’s this whole overhead of media on a scatter basis that’s available.